New York City-based New Fortress Energy LLC (NFE) continues to pursue rapid growth in underserved natural gas markets across the world, announcing plans to enter the offshore liquefaction space and build an import terminal in Southeast Asia.
The company, which is focused on delivering liquefied natural gas (LNG) to markets that lack access to the fuel, has sanctioned a 1.4 million metric ton/year (mmty) floating LNG (FLNG) facility that could be deployed anywhere there’s stranded gas. The company purchased two jackup oil rigs for $30 million that it plans to outfit with small-scale modular liquefaction trains. NFE said the project, dubbed “Fast LNG,” would come at a lower cost and could be deployed quicker than conventional FLNG technology, which uses larger trains on newbuild or converted vessels.
“Our innovative Fast LNG liquefiers should allow us to produce LNG between an expected $3-4/MMBtu for our growing portfolio of terminals around the world,” said NFE CEO Wes Edens. “This technology can be installed quickly and cheaply to access stranded, low-cost natural gas at a fixed price to meet the global demand for more affordable, reliable and cleaner energy.”
The company has not selected a location for deployment, but Edens said Fast LNG could enter service by 2022. The smaller trains would be mounted on top of a shallow-water jackup rig to liquefy natural gas. A permanently moored floating storage platform would also be employed nearby. NFE has already issued a limited notice to proceed to Fluor Corp., Chart Industries Inc. and Baker Hughes Co. for the construction of the first Fast LNG unit.
NFE went public in 2019 and has accelerated development since. It has four LNG terminals operating in Jamaica, Puerto Rico and Brazil, along with another five projects in development in Brazil, Mexico, Nicaragua and Southeast Asia. The company announced a $5 billion deal in January to acquire Golar LNG Partners LP and Hygo Energy Transition Ltd. that gave it a foothold in Brazil and provided LNG shipping assets.
NFE said in its fourth quarter earnings report that it is finalizing a framework agreement for a terminal in Southeast Asia that is expected to begin operations in the second half of this year. The company’s plans for an onshore LNG import terminal and merchant power plant in Mexico and a natural gas-fired power plant in Nicaragua are now expected to be completed by 2Q2021 after they were pushed back last year due to permitting and construction delays.
NFE was also awarded a supply contract by Mexico state utility Comisión Federal de Electricidad to provide 250,000 gallons/day (GPD) of LNG to replace higher-cost diesel beginning in the second quarter.
The company did hit a regulatory snag Thursday, when FERC Chairman Richard Glick asserted that the Commission would take jurisdiction over the company’s San Juan, Puerto Rico LNG terminal. The facility, which supplies fuel to gas-fired power generation units, industrial end-users and microgrids, was brought online in April 2020 without the Federal Energy Regulatory Commission’s approval.
FERC ordered NFE late last year to explain why it built the terminal without authorization. Glick said NFE must submit an application to operate the facility, but said it was in the public interest to keep it in service for now. The company has argued that it did not need approval under the Natural Gas Act to operate the terminal in the unincorporated U.S. territory.
NFE said its average daily sales volume in 4Q2020 was 1.4 million GPD, up from 538,000 GPD in the year-ago period.
The company reported a fourth quarter net loss of $500,000 ($0/share), compared to a net loss of $38.4 million (minus 30 cents) in the year-ago period.
As its operations have increased markedly, NFE reported a full-year net loss of $264 million (minus $1.71), compared to a net loss of $204.3 million in 2019.
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